Higher rates punish dividend payers in two ways, the theory goes. They attract money through safe-interest assets such as bonds and guaranteed investment certificates (GICs) that now boast competitive yields. And they are raising the cost of capital for heavy sectors that borrow heavily, such as utilities, pipelines and real estate.
When prices begin to decline, however, stocks tend to outperform other types of stocks. Their higher yields are starting to look more attractive again compared to investments and fixed income—raising the prospect of higher income multiples combined with higher income yields as investors circle back into the sector.
Consider our list of the top 100 Canadian stocks for 2024, below, as the beginning of your search for investment prospects, not the end. You may find yourself looking long and hard at what investors often consider dividend giants: banks, telecoms, utilities, pipelines and real estate investment trusts (REITs). (They are. It's just not that obvious.) Understand that this exercise is intended to identify candidates based on quantitative factors that include not only dividend yield and sustainability, but also profitability ratios, financial strength and value. (Read more about our best approach to dividend stocks.)
Finding the best dividend stocks in Canada
- Average yield (40% weighting) looks at current dividend yield and dividend growth over the past five years.
- Stability score (40% ratio) shows the debt-to-equity ratio, return on equity, five-year earnings growth, and the ratio of earnings per share to dividends.
- Rating score (20% weight) shows the stock's profitability (inverse of price-to-earnings) and price-to-book.
Top 100 stock prices in Canada
Many equity investors gravitate toward bank stocks—but these took a back seat to this year's top 100. Although they do reasonably well in dividends and valuations, bank stocks have suffered from poor stability scores compared to many dividend payers listed on the Toronto Stock Exchange. 2023, notes Aman Raina, investment coach and founder of Sage Investors, which released the data. “Insurance companies, in contrast, show a balance in scoring. So, if you are looking for financial exposure, this sub-category seems to have something good. “
One of the surprises in this year's best stocks list is how well manufacturing companies have fared in all three categories. “Since inflation and interest rates may fall, leading to lower real rates, this would provide [materials and energy] open some legs in 2024,” said Raina.
Depending on your investment process, treat the list below as a source of ideas, which will be expanded with deep diligence, especially during the year 2024. Our evaluation does not include quality factors such as company management, consumers and/or expertise. technological trends, or risks related to the countries in which companies operate, for example.
To view all the data in the table, slide the columns to the right or left using your fingers or the mouse. You can sort or reorder levels by using the search tool or by clicking on the column headings. You can also download data to your device in Excel, CSV and PDF formats.
Top dividend stocks in Canada for 2024
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